Combining Auctions with New Technology
http://www.forbes.com/sites/lianeyvkoff/2016/09/16/a-new-automobile-auction-house-shakes-up-old-business-model/#7da7ea6a347c
There is a new auction house named The Finest Automobile Auctions which is now combining the old practice with modern day technology and online shopping. The CEO of the auction house described how typically if an automobile isn’t sold during the 2 minute auction, it is typically sold later that day in a backroom deal for a price much lower than what the seller expected. The incredibly experienced car collectors know of this and will typically hold out on buying the car until after the auction closes and they can secretly buy the car for an incredibly discounted price. Therefore The Finest Automobile Auctions house has developed a new business model which increases the price that cars sell for, and evens the playing field by giving less experienced car collectors the opportunity to buy.
On the day of the auction every car is thoroughly detailed with images online so that anyone can be educated on the car, even if they’re not physically at the auction house. Then when the bidding opens bids can be submitted in person, over the phone, or on the internet. If there are cars that don’t get sold during the 2 minute auction, in a traditional auction house experienced buyers could get the car in a backroom deal for a lower price. However this auction house send an email to everyone bidding that the car will still be available for the next 24 hours. The other unique aspect of this auction is that the highest bidder at the end of those 24 hours doesn’t always win, because the auction will have 2 more minutes added where another buyer can make a higher offer. If this happens, there will be another 2 minutes added where a different buyer can make a higher offer. This will continue until no one can offer any more money. Through this method everyone has an equal opportunity to buy the car, and since there are no backroom deals the seller gets the maximum amount of money possible. This type of auction is not a first price or second price sealed bid auction, because all of the bidders know which prices the other bidders are bidding. Therefore this type of auction is an ascending bid auction where the price keeps going higher and higher until there is only one bidder left.